Benchmarking the Big 50

Membership in REMODELING's Big 50 now numbers more than 1,000 individuals. That's a large enough number to make for some interesting statistics. And as soon as we've finished updating Big 50 e-mail addresses, we'll be able to conduct regular surveys to discover what the best companies we can find can tell us about industry benchmarks. Until then, let's look at some of the stats on the 50 companies inducted this year.

Dollars and Cents

Size is the least determinative attribute of Big 50 companies, both in dollar volume and number of employees. Here are some of the high's and low's.

Dollar Volume

Obviously, remodeling companies don't have to be big to be profitable. In 2002, eight companies took in less than $1 million in revenue; of those, only one did less than $500,000 in volume, and another four did less than $700,000.

Payroll and productivity

But dollar volume isn't the only measure of size. Number of employees is also a good indicator, although two of this year's Big50 companies operate with just one field employee, and another seven use less than five in the field. Three of these companies take in more than $1.2 million in revenue, so there's got to be some subcontracting going on. Incidentally, these 50 companies provide gainful employment for 1,152 people, and that doesn't include subcontractors.

Number of Office/Field Employees

What about field-to-office ratio (field employees divided by office employees)? Individual companies were as high as 8 (not counting one company's 3 office/74 field ratio of 24.67) and as low as 0.25 (4 office, 1 field). Here are the averages broken down by volume:

Field-to-Office Ratio (by volume)

Averages can be deceiving, but these numbers seem to indicate that more companies are using more subcontractors for work that they used to perform using their own forces. That's not surprising considering the continuing labor shortage.

Productivity is a good number to look at as well. It tells us how much work we can get done with the number of employees we've got. The interesting thing about the averages this year is that while field productivity stayed steady regardless of company size, larger companies get more out of their office personnel. One explanation is that the owners of smaller companies, particularly those under $500,000, are pushed and pulled in too many directions. Adding an office manager can free up a small company owner's time to manage more work. Increased use of lead carpenters or production managers may also be responsible for higher productivity numbers in larger companies, or in companies that use a lot of trade contractors. Here are the average amounts of production volume each employee handles, listed by company volume:

Employee Productivity (by volume)